Federated Hermes (NYSE:FHI – Get Free Report) and Abacus Life (NASDAQ:ABL – Get Free Report) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.
Analyst Recommendations
This is a summary of current ratings for Federated Hermes and Abacus Life, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Federated Hermes | 1 | 3 | 2 | 0 | 2.17 |
| Abacus Life | 0 | 0 | 5 | 1 | 3.17 |
Federated Hermes presently has a consensus target price of $41.17, suggesting a potential upside of 9.55%. Abacus Life has a consensus target price of $14.00, suggesting a potential upside of 71.78%. Given Abacus Life’s stronger consensus rating and higher possible upside, analysts clearly believe Abacus Life is more favorable than Federated Hermes.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Federated Hermes | $1.63 billion | 1.87 | $268.31 million | $3.19 | 11.78 |
| Abacus Life | $111.92 million | 7.05 | $9.52 million | ($0.30) | -27.17 |
Federated Hermes has higher revenue and earnings than Abacus Life. Abacus Life is trading at a lower price-to-earnings ratio than Federated Hermes, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
75.9% of Federated Hermes shares are owned by institutional investors. 3.8% of Federated Hermes shares are owned by company insiders. Comparatively, 79.2% of Abacus Life shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Federated Hermes and Abacus Life’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Federated Hermes | 16.44% | 30.31% | 16.21% |
| Abacus Life | -11.65% | 12.88% | 6.51% |
Volatility and Risk
Federated Hermes has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Abacus Life has a beta of 0.16, meaning that its share price is 84% less volatile than the S&P 500.
Summary
Federated Hermes beats Abacus Life on 9 of the 15 factors compared between the two stocks.
About Federated Hermes
Federated Hermes, Inc. is a publicly owned investment manager. Through its subsidiaries, the firm provides its services to individuals, including high net worth individuals, banking or thrift institutions, investment companies, pension and profit sharing plans, pooled investment vehicles, charitable organizations, state or municipal government entities, and registered investment advisors. Through its subsidiaries, it manages separate client-focused equity, fixed income, balanced and money market mutual funds along with separate client-focused equity, fixed income, money market, and balanced portfolios. Through its subsidiaries, the firm invests in the public equity and fixed income markets across the globe. It invests in growth and value stocks of small-cap, mid-cap, and large-cap companies. The firm makes its fixed income investments in ultra-short, short-term, and intermediate-term mortgage-backed, U.S. Government, U.S. corporate, high yield, and municipal securities. It employs both fundamental and quantitative analysis to make its equity investments. Federated Hermes, Inc. was founded in 1955 and is based in Pittsburgh, Pennsylvania with additional offices in New York City and London, United Kingdom.
About Abacus Life
Abacus Life, Inc. operates as an alternative asset manager specializing in life insurance products. It purchases life insurance policies from consumers seeking liquidity and manages policies over time via trading, holding, and/or servicing. The company was founded in 2004 and is based in Orlando, Florida.
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